firms are raising funds, or moving to dispose of assets that
they rolled over during the crisis.’ Baker Botts has certainly seen an increase in one of its areas of expertise –
ECA-backed aircraft financing. The firm recently advised
on the financing for approximately 20 new aircraft for an
airline client. It also recently acted for Russian Post on an
ECA backed financing of mail sorting centers.

Interesting developments have been recognised. ‘I
would note the following significant trends in the Russian
banking and finance market – the increase of retail banking especially by state owned banks; the decrease of the
stake of the foreign banks in the market and the continued significant amount of overdue debt,’ comments
Roman Malovitskiy, head of the banking practice at
Egorov Puginsky Afanasiev & Partners.
‘Vnesheconombank exercises the vast majority of ECA
functions in Russia and it still supports Russian based
companies whose business has been affected by the
recession.’ Egorov Puginsky Afanasiev & Partners advised
the Federal Agency for State Property Management in
the privatization of its 10% share in VTB Bank. ‘This was
the first ever sale of Russian state property via SPO involving international financial institutions acting as agents,’
adds Roman Malovitskiy.

Looking ahead the market seems positive.
‘Traditionally financing of trade in the energy, minerals,
agriculture and natural resources sectors was always key
to the Russian economy and this trend will continue to be
strong in the near future,’ comments Simon Allen, the
head of banking and finance at Goltsblat BLP’s Moscow
office. ‘Structured finance will be driven by demand for
Russian commodities and it will be one of the major
instruments for the financing of business development in
Russia and CIS in the coming months. The shortage of
international funding will continue to drive the demand
for new financing and Russian state owned banks with
strong balance sheets will accelerate their position in the
market and continue to be dominant players in the
region. Generally Russia has emerged as an important
and credible partner for the international banking community and this confidence will create a basis for the
introduction of more complex funding mechanisms, supported by finance institutions and export credit agencies.’

INITIAL PUBLIC OFFERING

The halcyon days of early 2008 may seem like a distant
memory, but the legal community is cautiously optimistic
about the growth of the IPO market in the future. ‘There
were several significant IPOs in Russia during 2010 and
more are scheduled for 2011,’ says Maxim Alekseyev.

‘Russian experts expect more than 40 Russian companies
raising more than $15bn during this year.’ In the past six
months ALRUD’s capital & equity markets team acted as
Russian legal advisor to the underwriters of Mail.Ru
Group’s offering, namely Goldman Sachs International, JP

‘I don’t believe that the market will ever
return like it was in Spring 2008 when
decoupling theory was all the rage and
Russian assets and the ruble were
valued at the top of the market mainly
due to the spike in oil prices and
commodity prices.’

‘Presently the issue of Russian IPOs is at the peak of itspopularity,’ agrees Alexander Muranov from Muranov,Chernyakov & Partners. ‘The trends of the IPO marketdevelopment in Russia are similar to those of the USA andEuropean markets. There is a growing interest to IPOs,and the forecast for the market dynamics in Russia is pos-itive. According to experts’ estimates, the volume of theIPO market in 2011 may be up to $20bn. However, theRussian market and international trading venues demon-strate a high degree of volatility, the trading venues aresusceptible to the slightest fluctuations, as is the Russianmarket, with a greater discount towards developing mar-kets. The domestic companies’ securities are heavilyunderestimated. This is basically explained by Russiabeing associated with high risks.’‘This market is gradually reviving and a number ofcompanies have already indicated their willingness toarrange an IPO prior to the end of this year,’ commentsRoman Malovitskiy. ‘However, the market has not recov-ered yet.’ Egorov Puginsky Afanasiev & Partners advisedUC RUSAL on its IPO on the Hong Kong Exchange.United Company RUSAL Plc, a company headquarteredin Moscow and incorporated in Jersey, raised around$2.24bn through its new listing on the Main Board of theStock Exchange on 27 January 2010.

For now at least the market seems relieved that some
degree of normality has returned. ‘I don’t believe that the